On May 1, 2008, Mr. Justice Bastarache writing for the majority at the Supreme Court, answered this question in the affirmative.
In this case, Mr. Evans, a union business agent, was dismissed without cause and without notice after 23 years of service. Following his dismissal, Mr. Evans claimed that he was entitled to reasonable notice and said he was prepared to accept 24 months’ notice, 12 of which would be worked. After some discussion, the parties were unable to come to an agreement on the conditions of his return to work and the employer demanded that Mr. Evans return to his job for the remainder of the 24-month period. The employee refused because the employer would not retract the letter of dismissal.
The Supreme Court of the Yukon Territory found that the worker was wrongfully dismissed, given the lack of valid grounds and reasonable notice. It granted him 22 months of notice, based on the premise that the employee’s refusal to return to work for his ex-employer was not a breach of his duty to mitigate his damages.
The Yukon Court of Appeal reversed this decision and cancelled the notice the worker had been awarded. It held that the worker’s refusal to return to his job was not justified and therefore that he had failed to mitigate his damages.
The Supreme Court dismissed the appeal from this decision. According to the majority, it is not unreasonable for an employer to ask a dismissed employee to mitigate his damages by agreeing to work for it on a temporary basis.
However, the Court held that the worker’s refusal could be justified if there were obstacles to his returning to work. This must be assessed objectively by comparing it to a case of a reasonable person in the same position as the employee. The critical element is that the employee must not "be obliged to mitigate by working in an atmosphere of hostility, embarrassment or humiliation". Accordingly, intangible factors must be taken into account, such as the work atmosphere, stigma and the loss of dignity as well as the tangible factors such as the nature and conditions of the job, including the salary.
It is only under favourable conditions that an employee will be required to mitigate his damages by returning to work for an employer that dismissed him.
In this case, the Supreme Court found that the employer-employee relationship had not seriously deteriorated, and considering that his employment conditions were maintained, it was objectively not unreasonable for the employee to return to his job in order to mitigate his damages.
In its decision, the Court found that the obligation to mitigate damages by returning to work for an ex-employer applies equally well in cases of constructive dismissal, where an employee refuses to accept a material change in his working conditions, as to cases of wrongful dismissal.
According to Madam Justice Abella, the only dissenting judge, to require that an employee dismissed without cause mitigate his damages by returning to work for his ex-employer is a "rarely reasonable" expectation. She found that the raw application of the remedial principle of mitigation "has the danger of making routine the requirement to accept re-employment with an employer who acted wrongfully". She found that this did not take into account the uniqueness of the individual employment contract and the fact that an employee cannot be forced to work against his will.
Furthermore, according to the same judge, one cannot apply a purely objective test to appreciate whether or not a dismissed employee’s decision not to return to work for his ex-employer is reasonable. Indeed, "different employees will be differently affected by a dismissal, and are entitled to consideration being given to the reality of their own experience and reaction". The court must therefore consider the subjective perceptions of the employee when it evaluates what a "reasonable person in the position of the employee would do".
The dissenting judge found that the trial judge had considered both the subjective and objective factors in determining that the employee’s refusal to return to work for his ex-employer was reasonable. He had therefore not erred.